Goldman Sachs Group Inc., the world's biggest securities firm by market value, revised higher its New York crude-oil price forecast for the second half of this year by 32 percent, citing supply constraints.
Goldman now forecasts West Texas Intermediate, the benchmark crude grade traded in New York, will average $141 a barrel in the second half of the year, up from its previous forecast of $107. Prices will rise further in 2009, averaging
$148 a barrel, the bank said.
``Supply constraints and a lack of scaleable substitutes are set to continue driving the long end of the oil curve higher,'' Goldman analysts including Peter Oppenheimer and Jeffrey Currie in London wrote in a report dated today.
The trend in the growth of oil supply has fallen to 1 percent per annum, compared with global economic growth of about 3.8 percent, the report said. ``Given this imbalance, long-term oil prices will need to rise.''
The front-month West Texas Intermediate futures contract on the New York Mercantile Exchange has averaged $104.30 a barrel so far this year. In the third quarter, Goldman Sachs forecasts the price will rise to $135.30 and $145.60 in the fourth quarter.
Europe's Brent crude futures contract should rise to $133.80 a barrel in the third quarter of the year and $144.10 in the final period, according to the bank. The front-month Brent contract on the ICE Futures Europe exchange has averaged $102.52 a barrel this year.
WTI crude for June delivery rose $1.12 to trade at $125.24 a barrel in after-hours trading on the New York Mercantile Exchange at 10:27 a.m. in London today. It reached a record intra-day high of $126.98 on May 13.
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